It's April. Which means your inbox is full of tax reminders, your CPA is in crunch mode, and you're probably toggling between "I think we're fine" and "wait, did anything change this year?"
Here's the honest answer: yes, actually. A lot changed. And some of it is genuinely good news.
Whether you're a business owner in Fargo, a founder with operations across the Minnesota border, or a leadership team just trying to understand what your numbers mean — here's a plain-language breakdown of what's new in 2026 and what it means for you.
Frequently Asked Questions: 2026 Business Taxes for ND and MN Owners
Is the QBI deduction still available in 2026?
Yes — and it's now permanent.
The 20% Qualified Business Income (QBI) deduction was made a permanent part of the federal tax code when the One Big Beautiful Bill Act (OBBBA) was signed into law in July 2025. If you operate as an S-Corp, LLC, partnership, or sole proprietorship, this is one of the most valuable deductions available to you.
What that means practically: you can now plan around this deduction with confidence. It's not expiring. It's not subject to renewal. That kind of certainty changes how you think about long-term tax strategy — and it's worth a real conversation with your financial team.
What's the deal with bonus depreciation in 2026?
Also good news. The OBBBA restored 100% bonus depreciation indefinitely.
If your business purchased equipment, vehicles, technology, or made other capital investments in 2025, you may be able to deduct the full cost immediately — rather than spreading it over several years. This can significantly reduce your taxable income and improve your cash position.
Ask yourself: Did we buy anything significant last year? If yes, make sure your CPA knows the details and has captured this correctly.
What changed for North Dakota businesses specifically?
North Dakota had a big year on the tax front. The state moved to a simplified three-bracket income tax system with a top rate of just 2.5% — one of the lowest in the Midwest. Combined with the federal changes from the OBBBA, this is genuinely meaningful savings for ND business owners and individuals alike.
A few other things worth knowing if you're in North Dakota:
- Fargo sales tax boundary change: Effective January 1, 2026, the city boundaries for sales and use tax purposes changed. If your business operates near the city limits, it's worth confirming you're collecting the correct rate.
- Property tax calculation change: North Dakota now applies property tax discounts before home credits — a procedural shift that can affect your total tax relief. If you own business property, compare your 2025 and 2026 statements.
- R&D expensing is back: If your business invests in research or process development, you may now be able to deduct those costs immediately rather than amortizing over time.
What's happening with Minnesota business taxes in 2026?
Minnesota has several moving pieces right now — some confirmed, some still being debated at the state legislature.
What's confirmed:
- Corporate franchise tax rate reduction: Minnesota's corporate tax rate is dropping to 9.05% in 2026, with another reduction potentially on the horizon for 2027. If you operate as a C-corporation in Minnesota, you'll keep more of your profits. This is also making the C-corp structure more appealing for businesses considering entity restructuring.
- Corporate AMT relief: Minnesota is also reducing its corporate Alternative Minimum Tax rate, which could provide meaningful relief for businesses that are subject to it.
What to watch:
- Proposed sales tax expansion to professional services: This is the one we're keeping a close eye on for our clients. Governor Walz's proposed 2026–2027 budget includes a plan to expand Minnesota's sales tax base to include professional services — things like legal work, accounting, financial advising, and consulting. If it passes, service-based businesses that have never had to collect sales tax would suddenly need to. Business-to-business transactions would remain exempt under the current proposal, but that's still being evaluated. This is not law yet, but it's something every Minnesota service-based business owner should be aware of.
- Digital advertising tax proposal: A separate bill under consideration would apply sales tax to digital advertising services. If your business spends significantly on online ads, this is worth monitoring.
I already filed — is there anything I should still be doing?
Yes. Filing your taxes and understanding your financial picture are two different things.
Tax season is one of the best natural checkpoints of the year. Once the dust settles, it's worth asking:
- Did my numbers surprise me? Why?
- Am I structured in the most tax-efficient way given the 2026 changes?
- Do I have a plan for Q2 and Q3, or am I just reacting month to month?
These are exactly the kinds of questions we help business owners work through. Not with more spreadsheets — but with clear, actionable conversations about what the numbers actually mean.
Should I be working with a fractional CFO alongside my CPA?
Your CPA is focused on compliance — making sure you file correctly and on time. That's critical work, and we're not replacing it.
What a fractional CFO does is different: we help you understand what your financials are telling you beyond tax season. How is your cash flow actually trending? Are you pricing for profitability? What decisions should you be making now to set up a stronger 2027?
If you've ever walked out of a tax meeting thinking "okay, but what do I do with that?" — that's the gap we fill.
The Bottom Line
2026 brought real changes — some significant wins for business owners, and some uncertainty worth watching. The business owners who come out ahead aren't necessarily the ones who paid the least in taxes. They're the ones who used this season as a moment to get clear, make a plan, and stop reacting.
If you want to talk through what any of this means for your specific situation, we'd love to help.
[Schedule a conversation with the Light team → lightconsulting.com/contact]
Sarah West is the founder of Light Consulting, a fractional CFO firm helping business owners and leadership teams find financial clarity and build smarter strategies. Light Consulting serves clients across North Dakota, Minnesota, and beyond.
Making business feel a little lighter.
